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Leaked Document: Germany Plans EU "Nanny" for Greek Budget

A call by Germany to install a budgetary baby sitter in Athens has accelerated progress toward a centralized European budgetary oversight.
By Amiel Ungar
First Publish: 1/30/2012, 12:28 PM


As opposed to leaks in the home that are a nuisance and expense to owners and a financial boon to plumbers, political leaks are designed to serve a purpose.

This description easily fits a leaked EU document about German ministerial plans to provide the Greek government in Athens with an EU budget babysitter. The "nanny" from Brussels would I have the final say on Greek tax and spending plans.

The Greeks predictably reacted with fury. Anna Diamantopoulou, the Education Minister and herself a former EU commissioner, described the idea as “the product of a sick imagination”. Other Greek politicians claimed that Greece would never relinquish control over its budget especially after Greece had complied with the austerity demands. Brussels, they fumed, ought to be satisfied with the country's compliance.

The threat however seems to have worked. First of all, although the EU backtracked from the German proposal, it essentially extended the idea to all the heavily indebted European states as part of a budgetary compact. The "nanny" will not sit in Brussels, not the national capitals, but will continue to have a quasi-veto power on financial matters. As in the Godfather, it is nothing personal specifically targeting Greece; it is only business. Christine Lagarde, the IMF Chair, has given her organization's support for the idea.

The threats of turning Athens into a ward of the European Union may have speeded up a settlement between Greece and her private creditors and firmed up cross party support for the austerity package in Greece given the threat of losing financial independence..

The threats of turning Athens into a ward of the European Union may have speeded a settlement between Greece and her private creditors and firms up cross party support for the austerity package increase.

Brussels got another good piece of news when the British government informed the European Commission that Britain would contribute upwards of £15 billion to the International Monetary Fund..This was an attempt to, on the one hand, maintain the government policy of not bailing out the euro while in fact in doing the same via the back door - in contributing to the IMF.

The caveat is that the money is not limited for bailing out European countries, although only the most incurably gullible will fall for this sleight of hand. George Osborne, the Chancellor of the Exchequer, stated that while Britain was not a member of the euro ,it was an IMF member.

Osborne is counting on the support of the British Labour Party in the event of a revolt by Euroskeptics in his own party. Opposition leader David Miliband has tried to inject a note of uncertainty by threatening that Labour could very well vote with the rebels in the Conservative party to defeat the transfer of money to the IMF.